ADV.L Share News (ADV)

(Sharecast News) - Advance Energy updated the market on the Buffalo project, offshore Timor-Leste on Wednesday, ahead of the drilling of the Buffalo-10 well.
The AIM-traded firm said the operator, Carnarvon Petroleum Timor, had advised that the Valaris JU-107 jack-up rig was currently en-route to the well location, with spudding of the well expected to begin within a week.

It said the estimated time to drill and complete the well was around 35 days.

The base case well design was to drill a 36 by 26 inch hole and set a 30 by 20 inch conductor at around 120 metres, and to drill a 17½ inch hole and set a 13⅜ inch surface casing at around 800 metres.

It would then drill a 12¼ inch hole and set a 9⅝ inch intermediate casing at around 2,800 metres, and drill an 8½ inch hole and set a seven inch production liner to approximately 3,500 metres.

Once the oil column encountered was determined from wireline logging, the Buffalo-10 well would likely be suspended, ready for re-entry as a production well for the future Buffalo field redevelopment, assuming commerciality was proven.

The company said the Buffalo-10 well was being drilled offshore Timor-Leste within the TL- SO T19-14 production sharing contract (PSC), in a water depth of about 30 metres.

It said the well was being drilled to test for the presence of commercial quantities of high-quality light oil that was expected to lead to the early re-development of the Buffalo field.

RISC Advisory certified the mid-case recoverable volume in the field to be 34 million stock tank barrels of gross 2C contingent resource, with the primary objective of the Buffalo-10 well to demonstrate the presence of a significant, previously-undrilled attic oil accumulation, and for that resource to be converted to 2P reserves.

Additionally, the competent person's report developed by RISC in March demonstrated that an economic development of the 1C resource of 16 million stock tank barrels would be viable down to an oil price of $35.

It was thus considered that there was a "strong likelihood" that the Buffalo-10 well would confirm an economic development project, with RISC's report estimating the probability of development to be 86%.

"As previously noted, the drilling of this well is transformational to Advance Energy, representing a material value catalyst for the company and our shareholders, and we are excited to report today's operational milestone," said Advance Energy chief executive officer Leslie Peterkin.

"We look forward to providing further updates as the drilling program progresses."

At 1242 GMT, shares in Advance Energy were down 3.79% at 4.19p.